Immigration and the Fair Tax Bill

I am a big fan of the Fair Tax Bill (HR 25 this year). I suspect many conservatives here are. The idea of putting thousands of lawyers and accountants out of work would be a dream come true.

Mac Johnson has written a column about how passing the fair tax would help immigration. I thought it was great. You may read the entire column at:

http://www.humaneventsonline.com/article.php?id=15535

Highlights:

 

Technically it is called a consumption tax. You can learn more about it here:

http://www.fairtax.org/

The FairTax proposal is a comprehensive plan to replace federal income and payroll taxes, including personal, gift, estate, capital gains, alternative minimum, Social Security/Medicare, self-employment, and corporate taxes. The FairTax proposal integrates such features as a progressive national retail sales tax, dollar-for-dollar revenue replacement, and a rebate to ensure that no American pays such federal taxes up to the poverty level. Included in the FairTax plan is the repeal of the 16th Amendment to the Constitution. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.

From fairtax.org

The FairTax:

• Abolishes the IRS
• Closes all tax loopholes and brings fairness to taxation
• Maintains our current Social Security and Medicare benefits
• Brings transparency and accountability to tax policy
• Allows American products to compete fairly
• Reimburses the tax on purchases of basic necessities
• Enables retirees to keep their entire pension
• It completely detaxes the poor – no American below the poverty level will pay one dime in taxes.
• It ends federal payroll deductions and the Social Security Tax
• Enables workers to keep their entire paycheck

While it is true that it would do nothing to stop the underground economy [If you grow corn, I own trees, and I trade you a truck load of firewood for a load of corn than I get to eat and you can heat your house and we never paid taxes to anybody] it would eliminate the transfer of assets to offshore accounts because there would no longer be any reason to do so. It would encourage savings because you would not be taxed on your money until you spend it.

The example of the used cars is completely false. The only way the dealer could avoid paying sales tax on the cars would be to prove that he charged sales tax when he sold them. At whatever point the vehicle was consumed tax would be paid. What would happen in the example billwald gave would be that the dealer would only have to pay tax on the wholesale price of the vehicle if he sold it used. The tax savings would only be on the difference between the wholesale and retail prices. (but I thought all car dealers sold less than wholesale, that is what they say on TV)

Of course the biggest plus I see of the fair tax is the abolition of the IRS. No returns, no audits, no record keeping, no government institution prying into my private life. To me that equals greater personal liberty for all Americans.

57 members of the house are now co-sponsors of this bill.